Do you remember the 2015 news coverage of a Texas teenager caught fleeing the country to avoid the consequences he was facing after violating probation? During his drunken driving trial, a psychologist coined the term “affluenza” to refer to the impact financial privilege can have on a child’s ability to understand the impact of his or her actions. While this notorious defense didn’t hold water in court, the concept of wealth as ill-gotten, rather than hard-earned, has become more mainstream.
While it may seem counterintuitive, being wealthy poses its own set of unique challenges when it comes to raising financially literate and responsible children. Parents who don’t need to worry about money tend to be more likely to forget the necessity of teaching their children how to properly manage their finances. This leaves some privileged kids at a significant disadvantage because they never learn the skills they will inevitably need later in life.
An important part of being a parent is empowering your children with the skills they need to navigate decision-making as adults. Parents must actively and deliberately teach their children how to manage money wisely to avoid the possibility of kids catching “affluenza.”
As they grow, children are like sponges and can pick up all sorts of impressions and attitudes about money – most of all from their parents. In wealthy households, this can result in children who are hyperaware of the power that wealth can bring. However, they may not fully understand the source of wealth or the complexities that go along with it. Because of this, parents must be diligent in providing guidance and teaching their children about the value of money.
If you’re raising privileged kids, here are some tips for ensuring they become financially savvy and generous young adults.
Use Language Cues
When it comes to raising privileged children, it’s crucial to focus on values and the language you use around money topics. Set a solid example for your children to emulate by centering family values around ideas such as safety, respect, responsibility, and care for others. Doing so can communicate a more wholesome and healthy approach to money.
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Discuss the Positive Impact of Money
Ensure that financial conversations in your family highlight the importance of wealth beyond cash and possessions. Focus on teaching your children about how valuable non-material wealth is, emphasizing things like intellect, family values, and how to contribute to the community.
Parents who take the time to volunteer and have centered their work on making their communities healthier and stronger can simultaneously demonstrate to their children what it looks like to stand for something bigger.
Limit Spending Sprees
As parents, it’s normal to want to provide your children with everything they could possibly want. When you have the means to, the temptation to meet their every desire can be incredibly difficult to resist. However, imposing appropriate boundaries and saying “no” sometimes, even when you could say yes, can teach your children valuable lessons.
Be sure that you’re consistent with your boundaries and rules, explain the reasoning behind your decisions clearly to your children, and have a specific goal in mind for the limits you’re setting.
Get Back to the Basics
One of the best ways to ensure that your child will be able to handle their financial future is to teach them the basics of money management. Sit your children down and teach them about how to set financial goals and put a cash flow plan in place to meet them.
A great way to do this is to make a six-month lifestyle budget for children under 10, and an annual one as your kids get older. Work with them to create a calendar and have them write out the cost of expected expenses for the month, whether it’s new clothes, videogames, or music purchases, etc.
Walking privileged kids through their everyday spending decisions can help them recognize that money is finite and teach them to better manage it.
Instill a Work Ethic
A great way to teach your children the value of a dollar is to let them experience what it’s like to work for it. Insisting that your children work during high school and helping them get a job where they can develop relationships with people from different social classes can help them learn about different perspectives when it comes to finances. Think back to your first job – there was so much more to it than simply earning a paycheck, right? Encourage your kids to get those life experiences, too.
Break the Bubble
Building off the previous tip, privileged kids are often sheltered from certain experiences and lifestyles when they grow up inside a bubble of wealth. This can cause them to grow up to be out of touch from the ‘ordinary’ world. Introducing your children to important experiences such as working for a paycheck, meeting people from different lifestyles, and getting in touch with their philanthropic side can help make them more well-rounded human beings.
Ultimately, the key to raising children with healthy attitudes about money comes down to setting a good example for them to follow. More often than not, we learn money lessons the hard way through tough life experiences. However, children in wealthy households may have to learn in different ways. Taking the time to discuss money with your kids in more compassionate and comprehensive ways while giving them the opportunity to learn important money lessons can ensure they develop solid money values and don’t take their privileged upbringing for granted.